How to choose a mortgage broker in Sydney

What a broker actually does

A mortgage broker is an intermediary between you and lenders. Instead of applying to one bank, you give your details once and the broker compares options across the lenders on their panel, recommends a loan, and helps you through the application to settlement. In Australia, most borrowers now use this route: brokers arranged around 70 percent of all new residential home loans through 2024, according to the Mortgage and Finance Association of Australia (MFAA).

A good broker saves you time, translates lender jargon, and can match your situation to a lender likely to say yes. A weak broker simply pushes whatever is easy for them. The rest of this guide is about telling the two apart.

1. Check the licence first

In Australia, arranging credit is regulated. A broker must either hold an Australian Credit Licence (ACL) or operate as a credit representative of an ACL holder. This is not optional and it is easy to verify.

• Ask for their ACL number or the name and number of the licensee they represent.
• Check it on the ASIC Connect professional registers, which are free to search.
• Ask which industry body they belong to, such as the MFAA or the FBAA, since membership adds a code of conduct and a complaints path.
• Confirm they are a member of the Australian Financial Complaints Authority (AFCA), which handles disputes at no cost to you.

2. Ask about the lender panel

A broker can only offer loans from lenders they are accredited with, known as their panel. Panel size and makeup matter because they define your real choice.

• How many lenders are on the panel? Many brokers work with 20 to 40 or more.
• Which lenders? A healthy panel mixes major banks, second tier banks and non bank lenders, so unusual situations still have options.
• How often do they use the full panel, versus sending most loans to one or two lenders? Concentration can be a sign of convenience rather than fit.

3. Understand how they are paid

Most brokers are paid by the lender, not by you, through an upfront commission when the loan settles and a smaller trail commission over the life of the loan. That is normal and legal, but it creates a possible conflict, so transparency is what counts.

Australian brokers are held to a best interests duty, which legally requires them to act in your best interests. Ask them to explain, in writing, why the recommended loan suits you better than the alternatives they considered.

4. Ten questions to ask before you commit

• What is your credit licence or credit representative number?
• How many lenders are on your panel, and which did you compare for me?
• How are you paid, and will you disclose commissions in writing?
• Why is this loan in my best interests over the runners up?
• What are the comparison rate, fees and any break costs?
• What is your approval and settlement timeframe?
• Will you handle the lender back and forth, or will I?
• What happens if my situation changes before settlement?
• Can you share references or verifiable reviews from clients like me?
• Who do I contact after settlement if something goes wrong?

5. Red flags to walk away from

• Pressure to decide today, or to sign before you understand the loan.
• Only ever recommends one lender, regardless of your situation.
• Will not put commissions or the comparison in writing.
• Cannot produce a licence number or register entry.
• Encourages you to overstate income or understate expenses on the application.
• Reviews are generic, anonymous or impossible to verify.

Frequently asked questions

Next steps

Run your numbers through the budget planner first, then read the guide that matches your situation: first home buyers, refinancing, or self employed and low doc loans. New terms are defined in the glossary.